Manufacturing Overhead Accounting- Actual and Applied PDF

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Manufacturing Overhead Accounting- Actual and Applied ADAPTED: Pedro P. Guerrero, Cost Accounting – Principles and Procedural Applications – 2014 – 2015 Edition MULTIPLE CHOICE: 1. Costs that are not conveniently identified with particular orders or units of products. a. Manufacturing overhead b. Direct labor c. Direct materials d. Manufacturing costs Answer: A. Manufacturing overhead 2. What costing system is used to avoid any delay in the costing of jobs as experienced in actual costing? a. Process costing b. Job order costing c. Historical costing d. Normal costing Answer: D. NORMAL COSTING 3. What costing system is used to allocate overhead with the use of a predetermined overhead rate determined at the beginning of the year based on budgets. a. Normal costing b. Actual costing c. Job order costing d. Process costing Answer: A. NORMAL COSTING 4. A credit balance in manufacturing overhead control account is: a. Over applied overhead b. Under applied overhead c. Idle capacity variance d. Spending variance Answer: A. Over applied overhead 5. A debit balance in the manufacturing overhead control account is: a. Over applied overhead b. Under applied c. Idle capacity variance d. Spending variance Answer: B. Under applied 6. Over applied manufacturing overhead would result if: a. Manufacturing overhead costs incurred were less than costs charged to production. b. Manufacturing overhead costs incurred were unreasonably large in relation to units produced.

c. Manufacturing overhead costs incurred were greater than costs charged to production d. The plant were operating at less than normal capacity. Answer: A. Manufacturing overhead costs incurred were less than costs charged to production 7. When the amount of over applied manufacturing overhead is significant, the entry close Over Applied Manufacturing Overhead will most likely require: a. A debit to Cost of Goods Sold b. Debits to Cost of Goods Sold, Finished Goods Inventory, and Work in Process Inventory c. A credit to Cost of Goods Sold d. Credits to Cost of Goods Sold, Finished Goods Inventory, and Work in Process Inventory Answer: D. Credits to Cost of Goods Sold, Finished Goods Inventory, and Work in Process Inventory 8. The most common treatment of the under applied overhead at the end of the year would be to: a. Carry it as a deferred charge on the balance sheet b. Report it as a miscellaneous expense on the income statement c. Debit it to Cost of Goods Sold d. Prorate between Work in Process Inventory and Finished Goods Inventory Answer: C. Debit it to Cost of Goods Sold 9. All of the following phrases are used as alternate terminology for manufacturing overhead except: a. Manufacturing expense b. Indirect manufacturing cost c. Factory expense d. Other expense Answer: D. Other expense 10. What does a favorable variance represent? a. The actual overhead costs were less than the costs applied to production. b. The actual overhead costs were more than the costs applied to production. c. The spending variance is more than the volume variance. d. The spending variance is less than the volume variance. Answer: A. The actual overhead costs were less than the costs applied to production....